The state-owned Dairy Development Corporation (DDC) has increased the retail price of milk.

The revised price came into effect on Thursday.

A half-litre of standard milk that comes in a blue packet now costs Rs48.50, up by Rs5.50.

A half-litre of full cream milk in a green packet now costs Rs65, up by Rs8.

Similarly, a half-litre of cow milk that comes in a yellow packet now costs Rs58, up by Rs7.

The milk prices, however, are different for different locations outside Kathmandu.

“We have fixed the new price as per the directive of the Ministry of Agriculture and Livestock Development,” said Sanjeev Jha, general manager of the DDC.

The prices of other dairy products will be increased soon, Jha said.

According to Jha, the cost of production of milk has gone up due to the hike in feed prices and transportation costs, so it was necessary to increase milk prices.

“This timely revision of the prices will also encourage more people to enter dairy farming and boost milk production at a time when the farmers are abandoning the dairy sector owing to falling profits,” said Jha.

“The corporation is facing a milk deficit of around 60,000 litres daily. The period between mid-April and mid-August is a lean season when milk production falls markedly,” said Jha.

In its heyday when milk was in abundance, the corporation would produce powdered milk and store it for use during the lean season. “But this year, the corporation could not produce powdered milk owing to a short supply of raw milk, " he said.

“There is a ban in place on milk imports, but given the shortage, we need to consider lifting the ban because we are struggling to meet the daily demand,” Jha said.

The Kathmandu Valley’s daily demand for milk is 75,000 litres. The demand for yoghurt is 3,000 litres.

On March 3, the government hiked the minimum purchase price of raw milk paid to farmers by Rs9.1 per litre to Rs65.5.